Understanding Commercial Building Insurance
Commercial building insurance is insurance that is specifically designed for businesses. So, in essence, it is insurance that covers commercial buildings against any losses that result from things like theft, vandalism, fire and natural disasters. When looking at commercial building insurance, you have to be very aware of what kinds of coverage you are getting. Some types of commercial building insurance protect only the structure of the building. Other types will include protection for furnishings and business equipment. You might even see coverage that extends to personal injury, or death that occurs on the premises.
When checking into commercial building insurance, you will see that it is normally divided into two types of insurance coverage. There is the named-peril policy, and also an all-risk policy. In essence, the coverage is exactly what the name specifies.
A named-peril policy will protect your property in the event there are unforeseen calamities of a specific nature. These events will be clearly designated in the policy document. A named-peril policy could conceivably cover damage that results from fire and explosions. Alternatively, it might include flood damage and earthquakes. However, because this policy only covers explicitly listed risks, you need to be sure you have included the exact kinds of risks you want covered for your specific business.
In writing a named-peril policy, the insurance company brainstorms a list of likely unforeseen events that would cause damage. These specific perils are clearly listed in your policy. In fact, there will be a clause that states any event, not specifically listed, is not covered under this policy.
Named-peril coverage is different from an all-risks coverage policy. An all-risks coverage plan protects the business against all potential sources of damage. However, there are usually designated exclusions. Floods and earthquakes are generally the two things most policies exclude. On the other hand, you can add these as riders to your all-risks policy, if you want to do so. An all-risk coverage policy has an advantage in that it covers all the unexpected disasters, whereas the named-peril policy does not.
It covers much more, so an all-risk coverage plan tends to be more expensive. However, for most businesses, a named-peril plan is sufficient. Business owners simply add riders to cover the extras, if they so desire. Only the business owner knows his or her insurance needs. They depend on the location of the business, and the property and equipment you need protected.
Because there are a variety of companies and packages available, business owners can always find the small business package that meets their specific needs. When determining what you want insured, and for how much, you should consider not only the business property, but also figure out the value involved. Then make a decision on what does and does not need to be covered. Keep in mind the buildings involved, as well as any equipment and machinery that needs insuring. Also, remember there are inventory, documents and business records to consider, as well as databases and vehicles which you might use in your business.
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